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Mass Housing: Means to all ends

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Tata Housing Development Company (THDC) has been promoting a strategic mix of integrated townships, theme-based premium housing and of lately innovative and affordable homes. According to Brotin Banerjee, MD & CEO, Tata Housing is one of the few serious players in this segment. He briefs Buildotech on the definition of the term, scope, challenges and new building technologies specific to such projects.

The rising urbanisation has created an imminent urban housing shortage of around 18.78 million houses. The shortage is more prominent in the Economically Weaker Section (EWS) / Lower Income Group (LIG) / Middle Income Group (MIG), which comprises of 95.62% of the housing shortage. Quite aptly, urban planners, real estate players and the government have all been eyeing at the development of the mass or affordable housing projects to cater to the needs of the lower or middle income households.

The Definition

Mass housing, by Indian definition, means a multi-storied apartment-type house with a floor area of 70-120 square meters that costs about $27,000-$77,000. The demand for quality homes by middle-class families adds pressures to the mass housing needs. To counter this gap, Tata Value Homes Limited, a 100% subsidiary of Tata Housing has introduced two pan-India brands – Shubh Griha (Value Homes) and New Haven (Affordable Homes). The focus of this segment is to use innovation and cutting-edge design for building customer focused and sustainable homes.

A thrust on encouraging private sector participation in affordable housing, traditionally the domain of the government, could provide the answer to India’s urban housing predicament. But as things stand, affordable housing remains a challenging proposition for developers.

Design & planning

To achieve scale and speed, mass housing was the preferred option in the decades of the 1950 to the 1970s – a period of rapid population growth and urbanization globally. Mass housing hence is a concept of housing development that is publicly funded and administered for low-income families.

Such housing has been produced in many configurations including low rise, single dwelling units but more often multi story walk-ups or high rise apartment blocks. Housing units are laid out in clusters around open spaces or in parallel rows as well as other configuration.

While internationally, some public housing projects have been integrated within the city urban texture, in recent times with the rapid expansion of cities such newly developed mass or affordable housing estates are being located away from the crowded urban centres. Along with cheaper land, this kind of urban planning is laying the base for new townships. For instance, among the first projects, Tata Housing launched a 2,000 units, mass housing project in Boisar – an exurb (commuter town) of Mumbai. Other examples include, Shubh Griha and New Haven projects currently being developed in Boisar near Mumbai and Subh Griha project in Vasind near Ahmedabad

Construction & Building innovations

Technological interventions, innovative building materials, fast construction methodologies, quality products and industrialized housing can go a long way to fulfil the need for affordable housing in India. Along with the need to look into ways to cut costs, there is also an additional need for the housing stock to be eco-friendly.

For the real estate builders this means looking at methods that bring speed, quality and efficiency into construction, such as precast as it plays an important role in speedy construction. India is looking forward to prefab technologies as well for mass housing. Precast concrete has been used in India by the infrastructure industry for a long time to build things like tunnels, bridges and fly-overs. For buildings, it is used in stairs & landings, and for modular-buildings. The next evolution will see greater use of precast concrete in residential buildings. Also building construction is witnessing significant automation, and builders are now more ready to experiment with new techniques and building materials.

Tata Housing employs low-cost technologies and raw materials such as reinforced concrete blocks, precast hollow blocks, precast lintels, floor tiles and pre-fabricated panels and polymer panels for doors and windows. This has reduced construction costs by 20-30% and has saved 7-10% of costs compared to conventional construction.

Developers can also leverage on innovative and low-cost technologies such as pre-fabricated building materials, which can be used to construct mass houses quickly and cost–effectively. Although, pre-fab materials are 15-20% more expensive, developers would gain from the dual benefits of higher efficiency and lower labour costs. In Europe and the Middle East, the use of precast concrete and engineering homes technology has enabled certain developers in saving up to 64% of the total man hours needed using conventional methods.

Scope & Challenge

About ten Indian states contribute to three-fourths of the urban housing shortage. By providing affordable housing, the real estate sector can play a pivotal role in urban development of these states and in lieu, mass housing can offer an estimated business opportunity of $150 billion to the developers. However, the challenge lies in earning sufficient margin returns.

Urban Land: Without the government intervention, the limited availability of land in urban areas makes it unviable for developers to take up affordable housing projects. The available land parcels at present need better monitoring from authorities to make more optimum use and prevent the on-going proliferation of slums and squatter settlements in these areas.

Construction Costs: Unlike premium residential projects, where pricing is largely guided by land costs, prices of mass homes are primarily driven by the cost of construction. It forms nearly 60% of the total selling price in affordable housing projects. Hence, construction cost minimization is a vital aspect of making affordable housing projects viable. Raw materials, including steel, cement, sand, bricks, etc. have witnessed price escalation of 20-50% in the recent past.

Finance Constraints: Commercial banks and other traditional means of finance for housing do not serve the low income groups, whose income may vary or is below a liable threshold. Housing finance companies are unable to serve LIG and EWS categories owing to their inability to provide required documentation for hassle-free disbursal of loans.

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